How To Buy Altcoins

This information is general in nature and is for educational purposes only. Hedge With Crypto does not provide financial advice nor does it take into account your personal financial situation. We encourage you to seek financial advice from an independent financial advisor where appropriate and make your own inquiries.

Here's a quick guide that outlines the steps to buy altcoins:

1. Create an account with an altcoin exchange.
2. Complete ID verification.
3. Fund the account.
4. Buy the altcoin.

The first step in purchasing altcoins is to find and compare altcoin exchanges. A full list of the top-rated altcoin platforms can be found here, but for this tutorial, we will use Binance as an example to show each step in the buying process. The methodology is very similar for those who want to sell altcoins for cash.

Step 1 – Create an account with a crypto exchange that supports altcoins

Visit the Binance home page and click on “Register” to create an account. Investors must type in their phone numbers or email addresses and their desired passwords. A link will be sent to the trader to verify their accounts and, subsequently, to access the trading platform.

Step 2 – Complete the identity verification process

Like other regulated brokers, Binance requires users to have their ID verified. Failure to do this could limit the features accessible on the account. To complete the process, visit the “Identification” tab and provide proof of residence and a government-verified means of identification. This process takes just a few minutes. The process is required when buying altcoins with US Dollars or another fiat currency. Users can purchase altcoins on Binance with another cryptocurrency without completing ID verification. However, the withdrawal limits are reduced. Therefore, it is suggested that the basic verification level be completed. If done correctly, it will take approximately 15 minutes.

Step 3 – Fund a wallet with Bitcoin or fiat currency

The next step is to fund the account. Binance allows investors to deposit using payment processors, wire transfers, bank deposits, and direct crypto transfers. The minimum deposit amount is $10. A deposit can be made by going to the “Payment” section and clicking “Add a new payment method.” Alternatively, an investor could click the “Buy Crypto” button to choose a payment method and complete the deposit.

The alternative option is to fund an account with Bitcoin or another cryptocurrency, such as a stablecoin (e.g., USDT or USDC) that can be converted into a specific altcoin.

Step 4 – Choose and purchase the altcoin

With a funded crypto wallet, the altcoin purchase can finally be completed. In the “Buy Crypto” section, enter the desired coin and the purchase amount to exchange fiat currency for crypto. After reviewing the terms, click on “Continue,” and the purchase will be made. The altcoin will be stored in the user's Binance wallet and can be withdrawn to an external crypto wallet.

Where to Buy Altcoins

Before understanding how to buy altcoins, knowing where to buy altcoins is a crucial part of the process. We have provided a brief overview of some of the best altcoin exchanges below based on our reviews.

1. Binance

Binance is an excellent choice for those considering buying cryptos other than Bitcoin. Binance operates in over 100 countries, including the United States, where it operates via its American exchange Binance.US. The trading platform supports over 384 altcoin projects to buy, such as Ethereum, Solana, and many others, making it an incredibly liquid platform for anyone looking to buy and sell altcoins.

To buy altcoins on Binance, simply sign up on the exchange and make a minimum deposit of $10. Depositing is the primary factor to consider when buying altcoins on Binance. It also supports several payment methods including wire transfers, cards, payment processors, and e-wallets. As for fees, Binance charges a standard 0.1% fee for trades. However, traders can purchase BNB tokens for a 25% discount on trading charges.

Read our full review on Binance.

2. Coinbase

Coinbase is another reputable exchange that has become a household name. The cryptocurrency exchange platform is incredibly liquid, supporting over 9,000 crypto assets. The broker has a well-laid-out user interface that allows beginners to navigate easily. Crypto traders can start their altcoin journey and buy Solana or Cardano with a $2 minimum deposit.

Like Binance, Coinbase investors can access different payment methods, including credit/debit cards, wire transfers, payment processors, and crypto deposits. The exchange also provides a debit card for customers in some countries, allowing them to enjoy 4% cashback on deposits using its Coinbase Visa Card.

For more information on the buying fees, read our Coinbase review.

3. eToro

eToro is the best social trading platform to buy altcoins. It's easy to use, with a simple user interface and a quick registration process. US and UK investors can get started on eToro with a minimum balance of $100. The platform also offers zero-fee deposits (conversion fees apply). Without paying extra fees, you can fund your accounts using various funding methods, including wire transfers, debit, and cards.

The platform factors the fees immediately after placing an order, so traders know how much they're paying upfront. Investors can withdraw their funds after selling altcoins to fiat at any time but the broker charges a $5 fee per withdrawal. Learn more about the broker in this eToro review.

Cryptocurrency is offered by eToro USA LLC (“the MSB”) (NMLS:1769299) and is not FDIC or SIPC insured. Investing involves risk. Don’t invest unless you’re prepared to lose all the money you invest. This is a high-risk investment and you should not expect to be protected if something goes wrong. Take 2 mins to learn more.

4. Crypto.com

Investors looking to buy and earn returns from altcoins will be impressed with Crypto.com. As for fees, Crypto.com imposes trading fees based on tiers. While the platform’s Level One users are charged 0.4% on trades, Level Two users get to pay 0.35%. The broker also offers a 10% discount on fees if they are paid using its native CRO token. This doesn't mean that Crypto.com doesn't have its shortcomings. The platform accepts direct crypto and ACH deposits as the only payment channels, limiting users to these two channels alone. The minimum deposit of $20 is also slightly higher than what most brokers as identified in our Crypto.com review and comparison.

5. Kraken

Kraken has a strong base of altcoins from which traders can choose. The fees for the Instant Purchases are 0.9% for stablecoin purchases and 1.5% for other crypto projects. On the other hand, trades on the Kraken Pro are subject to either a 0.26% taker fee or a 0.16% maker fee for transactions up to $50,000. Another area of interest is the funding options available on Kraken. The exchange supports bank wires, debit cards, and e-wallet solutions, but their fees differ. For instance, Kraken charges 3.75% + 0.25c for card deposits, Apple Pay or Google Pay. ACH online banking purchases cost 0.5% + a Kraken fee of 1.5%, or 0.9%, is applied depending on the altcoins purchased.

The broker's minimum deposits vary depending on the funding method chosen. For instance, the minimum deposit for SWIFT transactions is 100 USD. US traders can enjoy free deposits if they fund their Kraken account using FedWire (MVB Bank) or FedWire (Signature Bank).

Read our Kraken review for more information on its altcoin buying costs.

What Is An Altcoin?

A simple definition of “altcoin” is any cryptocurrency other than Bitcoin. “Altcoin” denotes the combination of two words – “alternative” and ”coin.” Altcoin was coined by early cryptocurrency investors who saw the rise of Bitcoin and its ability to inspire the creation of other assets. Following Bitcoin's rise to the limelight, many individuals and companies decided to launch their cryptocurrencies. Keeping track of all these other coins proved challenging as the market began gaining more prominence. So, to provide a suitable nomenclature, industry insiders invented the term “altcoin.”

Most altcoins are built on distributed ledger technology. Today, there are many blockchains available. For instance, Ether (ETH) was originally built to operate solely on the Ethereum blockchain, while the Binance Coin resides on the BNB Smart Chain.

The Types of Altcoins You Can Invest In

Altcoins can be grouped into different forms. Here are some of the popular ones:

• Stablecoins: These are altcoins created to be pegged to the value of a fiat currency. So, at every point in time, the value of one unit of that fiat currency equals the value of one unit of the stablecoin. USDT is a dollar-pegged stablecoin, so $1 always equals 1 USDT.
• Security tokens: These are assets designed to mimic traditional securities. They are usually obtained via dedicated security token offerings. An excellent example is tZERO.
• Utility tokens: These are altcoins used to provide services within a network. They could be used to purchase services, pay fees, or offer rewards. Filecoin (FIL) is a good example.
• Meme coins: Altcoins are created to be parodies of other cryptocurrencies whose existence is generally based on a joke or meme. These coins tend to catch on among investors and can be valuable. Some of the top meme coins to watch the prices of are Dogecoin (DOGE) and Shiba inu (SHIB).

Reasons You May Consider Buying Altcoins

It's easy to think that Bitcoin is the only cryptocurrency worth investing in. However, this belief is wrong. Altcoins are also highly valuable assets with meaningful use cases and potential upsides. Here are some reasons investors should consider how to buy altcoins:

• Opportunity to make quick profits. Perhaps the most obvious reason for buying altcoins is their value as investment assets. While Bitcoin remains the most valuable cryptocurrency, it might not always be the most profitable. Take 2021, for example. Bitcoin was seen as the market's poster child, but its value only grew by 67.2% throughout the year. While this is a sizable gain, it doesn't compare to the gains witnessed by some altcoins. Solana (SOL), for instance, pumped by 12,200% in the same period. And several other altcoins saw similar jumps that were much better than Bitcoin.
• Rapid transaction times. Altcoins are also very useful in processing transactions and asset transfers. Thanks to coins like XRP and Stellar (XLM), international transfers are as accessible and as quick as possible. An investor can download a crypto wallet and use these coins to send and receive money in seconds. While this functionality isn't fully formed because of the limited crypto adoption worldwide, it should take center stage in the future. As more countries adopt crypto, investors will have more opportunities to use their digital currencies to make it easy and quick. Here's a list of the fastest cryptos in the industry to send.
• Governance and Staking. There is another class of altcoins called governance tokens. Holders of these assets get voting power on the platform. Holders can use their coins to share their opinions on platform development and directions – just as shareholders can influence company decisions for traditional companies. Establishing governance is usually done through staking – a process where token holders commit funds to the protocols. Staking is also beneficial because holders can earn additional units of the altcoin through the process. We have detailed the best staking coins to buy in this list.

Popular Altcoins To Buy

Investors looking to purchase alternative coins have many choices to select from. Here is a short list of promising altcoins to invest in with exciting futures ahead:

1. Ethereum (ETH)

The biggest altcoin to buy right now by market capitalization is Ethereum. The asset is the second-most valuable in the market behind Bitcoin alone, making it the frontrunner among altcoins. Ethereum is similar to Bitcoin in terms of performance. The asset has seen steady gains for years, and its value has continued to mirror Bitcoin's. Ethereum is usually one of the first altcoins to see gains whenever the market flips bullish.

Read our full guide on what Ethereum is and how to buy Ethereum.

2. Binance Coin (BNB)

BNB is the most valuable member of another class of altcoins called exchange tokens. These are coins developed by cryptocurrency exchanges to serve as their utility tokens. Popular cryptocurrency exchange Binance built BNB as a utility token on the platform. The crypto asset is a payment token for Binance traders interested in discounted trading fees. Instead of paying the standard 0.1% fee, BNB holders can pay using the coin and get a 25% discount. BNB's use case has expanded to include settling fees on the Binance Chain, processing payments, loans, and online purchases.

BNB has proven to be an incredibly valuable asset in terms of its price; investors can even stake BNB tokens to earn yield. The coin has coasted off Binance’s rise to enjoy impressive gains, and investors looking to keep earning profits can be sure of BNB’s reliability in that department. There are some exciting prospects for BNB. The asset's use case will grow as the crypto market gains more exposure.

Read our full guide on how to buy Binance Coin.

4. Cardano (ADA)

ADA is the native token for Cardano – one of the market's oldest and most popular blockchain platforms. While Cardano became popular among investors, it never particularly lived up to its potential as a blockchain because it didn’t support smart contracts – the critical feature that allows decentralized application (dApp) developers to build.

That changed in September when the Cardano Foundation implemented the Alonzo hard fork. The hard fork was a monumental success, implementing smart contracts for Cardano and making the platform more suitable for developers looking to build in the market. ADA’s price has since seen steady gains, albeit interrupted due to the current market downturn.

Cardano is also in the middle of another hard fork. Named Vasil, it is expected to be the most transformative hard fork in Cardano’s history since Alonzo. Among other things, Vasil is expected to improve the blockchain’s scalability while reducing transaction fees. In a market where developers are looking for the right platforms to build, Vasil improves Cardano’s allure significantly.

So far, ADA has been unable to deliver the type of gains many analysts expect due to the bear market. However, as the market works towards flipping bullish, this is one coin that investors should keep their eye on.

Read our full guide on how to buy Cardano.

5. Dogecoin (DOGE)

Dogecoin is the most popular meme coin and the most valuable by market cap. The asset was created in 2013 as a joke on cryptocurrencies, with its developers looking to parody how everyone seemed to be getting into the market. Interestingly, DOGE caught on among retail investors, and the asset’s profile rose.

DOGE has become a global phenomenon. A mixture of attention from investors on the Reddit platform and the endorsement of celebrities like singer Miley Cyrus and Tesla CEO Elon Musk took the asset to astronomical heights. Although the Dogecoin price has since dropped, investing in DOGE remains popular among buyers. It has developed a cult-like following in the market, and its developers are now looking to make it a more functional coin.

In 2022 alone, several companies have accepted DOGE for payments. This includes Tesla, which currently accepts coins for online merchandise. The Boring Company also accepts the leading meme coin for payment at its Loop in Las Vegas. The market expects more DOGE adoption as a payment method soon enough.

Read our full guide on how to buy Dogecoin.

6. Polygon (MATIC)

Finally, investors can also consider the altcoin MATIC. One of the most valuable coins by market cap, the asset is the native token for Polygon – a layer-two protocol built on Ethereum to help developers looking to build on Ethereum.

Interestingly, Polygon has also grown to become a suitable standalone blockchain platform. That stature has dragged many prospects through the front door. For instance, the platform was chosen by entertainment giant Disney as part of its Accelerator Program. Polygon is expected to help Disney incorporate new-age technologies, including NFTs and Web3, into its catalog. And as the market grows, platforms like these have brighter futures.